Gartner released its 2017 Wearable report this week and Apple has a reason to celebrate again. According to the Gartner report, Apple will continue to dominate the smartwatch category.
“Apple will continue to have the greatest market share of any smartwatch provider. However, as more providers enter the market, Apple’s market share will decrease from approximately a third in 2016 to a quarter in 2021. “
The announcement of a new Apple Watch expected in September may enable direct cellular connectivity and further enrich Apple Watch Sales and increase customer interest in this nascent product category.
Apple could also combat the decrease in market share when it comes to the smartwatch category by increasing the various health and fitness monitoring features.
Gartner forecasts that 310.4 million wearable devices will be sold worldwide in 2017, an increase of 16.7% from 2016. Sales of wearable devices will generate revenues of US$30.5 billion in 2017. Of that, US$9.3 billion will be from smartwatches.
Gartner expects other consumer electronics brands such as Asustek, Huawei, LG, Samsung and Sony to sell only 15% of smartwatches in 2021, because their brands do not have as strong an appeal as lifestyle brands for personal technologies.
In 2017, 41.5 million smartwatches will be sold. They are on pace to account for the highest unit sales of all wearable device form factors from 2019 to 2021, aside from Bluetooth headsets.
By 2021, sales of smartwatches are estimated to total nearly 81 million units, representing 16% of total wearable device sales.
HMD Wearables Suffering from Low Customer Adoption
Gartner’s latest report on wearables did not have a favorable reading towards the new HMD (Head mounted Display) category. HMDs account for only 7% of all wearable devices shipped in 2017, and will not reach mainstream adoption with consumers or industrial customers through 2021. This product category is still facing low adoption and is popular in certain use case scenarios such as video games.
Although we have seen many Apple patents in recent years centered around HMDs, it appears that Apple may have made the right choice by sitting on the fence and waiting it out.
On the other hand, the decision to pursue the Apple Watch product line may have been a blessing in disguise for the company. If the Apple Watch continues to attract new customers via the LTE offering, it may be another incentive for customers to switch from their Android devices to iPhones. We have already seen many people consider the iPhone because of the rising popularity of Airpods.
It is no wonder that Tim Cook’s mantra “ Apple may not be the first but it definitely strives to be the best” in a product category has deep implications around the success of Apple new product introductions.